Commercial Rates Observation

Discussion in 'Lawn Mowing' started by Tn Lawn Man, May 9, 2005.

  1. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Posts: 479

    Making an observation.....

    I have noticed that everytime there is a new person that comes on here and asks what to charge everyone barks at the poor fella that he should know his operating costs and charge accordingly.

    Then on the other side of the coin everyone goes insane when a lowballer is mentioned.

    Let's do the math for a moment.

    When I first started in this business I was a part timer with a homeowner's set up: 21" push, cheap weedeater, cheap blower....total investment <$500. (No insurance....don't start, that is another thread in itself)

    So my total operating costs was gas plus what I wanted to make an hour. To be perfectly frank if I would have taken advice from most on this board I could/should have mowed a lawn for about $15.

    Luckily for me, I had a mentor who helped me out with pricing and so I charged fair market rate.

    I say all of this to say that we here on Lawnsite can be our own worst enemies. We say we hate lowballers yet we never encourage new guys to charge market rate.

    I would think that our answer to new guys when they ask what they should charge should be...."As much as your market will bear as long as you are within your operating costs". And, then we should proceed to give them examples.

    This thread isn't meant to be a flame. In fact, my main reason behind it is to get guys charging market rate and not lowballing (which we all hate).

    Let's help the new guys learn how to price correctly so they don't lowball the industry any worse than what is going on.
     
  2. anothertractor

    anothertractor LawnSite Member
    Posts: 61

    This sounds good to me. I am new and I am still part-timing it for right now. Finding my operating cost is something that I would like mor info on. I have heard people say that your big ZTR costs $8 an hour. If I only put 150 hours per year, is that figure correct? What if I put 500 hours on it in a year? I can figure my fixed costs for the year but since I work fewer hours than a full timer, are my costs per hour higher than someonethat works 1200 hours per year?

    Thanks.
     
  3. SproulsLawnCare

    SproulsLawnCare LawnSite Senior Member
    from IN
    Posts: 365

    I'm probably wrong about this, but I think that the operating cost should be the same whether you run it for one hour or 1000 hrs. The only thing is your overhead would be extremely high ($7,000 to mow 1 hr). That is obviously an exaggerated example, but same point. But with not taking overhead in account, it would be useful to hear from those who have used their equipment for several years and have a running history of operating cost. General consensus would say that ZTR's run for $5 to $8 per hour; what about trimmers, stick edgers, wb's. etc.?
     
  4. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

  5. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Posts: 479

    My main point to this thread is too inform the new guy to set his prices as high as market will bear and not on his operating costs.

    If we keep telling them to figure their operating cost it will always be lower for a new guy part timer.

    Bigger operations are going to have higher overhead yet they make a bigger profit due to size.

    I just don't want us shooting ourselves in the foot in this industry.
     
  6. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    Operating costs definitly go down on a per hour basis if you are running reputable, high quality mowers. I ran a JD 332 for 5000 hrs, (cost originally $6100) therefore it basically cost a little over a dollar an hr. cost of equip. - in fact it is less than that because I just sold it for $1800. New owner loves it.

    How can you say 1 hr. or 500 makes no difference?

    I GUESS I AM ASSUMING THAT DEPRECIATION AND BUYING NEW EQUIPMENT WHEN THE OLD STUFF WEARS OUT IS AN OPERATING COST?

    I GUESS I AM ASSUMING THAT THE YEARS SITTING IN THE SHED ONLY PUTTING ONE HR. A YEAR ON IT IS GOING TO LOWER ITS VALUE - I WILL GUARANTEE YOU THAT PEOPLE BUYING USED EQUIPMENT WILL PAY MORE FOR A 4 YEAR OLD MACHINE THAN AN 8 YR. OLD MACHINE, I DON'T CARE WHAT CONDITION IT IS IN.

    Now for the basics of LCO business.
    1. A one acre yard in any part of the country is worth a range of fees which is specific to different parts of the country. - The higher fees going to those that are real LCO's - (Trim, Straight lines, Blow, etc) And the lower end of the fees going to those who just move in and mow, no matter how, just get the grass shorter.
    2. The customers in any part of the country are all different, yet all the same. Some what the real manicured look, with the trimmings, and some just want the grass shorter.
    3. With this in mind, there are no lowballers, just people happy with the service and people happy with the money they are willing to pay.
     
  7. NJSalesPro

    NJSalesPro LawnSite Member
    Male, from New Jersey
    Posts: 19

    Ok, so I have an appointment with a law firm who needs lawn care. What' s the best way to charge the client if he wants me to stop by once a week vs once every other week. I prefer a flat-fee method over an hourly fee.

    I'm in NJ where lawn care people are a dime a dozen - so I'm thinking 75 dollars per cut. If I come by 4 times a month, that's 300.00. Does this sound reasonable?

    Anyone else in NJ?
     
  8. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    MY GOSH - READ MY POST AGAIN - There is no way you can charge by the hour. What mower do you have? - You going to charge $90 per hr. with a 21" lawn boy? Or are you going to charge $ 10 per hr. with a 60" ZTR - - - - - - - - - - - - - - - I have repeated this on this site so many times, I think I am brain dead or the you all are brain dead, but I think it boils down to WHAT IS THAT YARD WORTH IN YOUR AREA - YOU ARE RESPONSIBLE FOR GETTING MOWERS THAT ARE THE RIGHT SIZE, AND DO WHAT IS NEEDED TO DO THE YARD FOR WHAT IT BRINGS IN YOUR AREA, AND LET YOU MAKE A PROFIT. WAKE UP. IT IS EFFICIENCY - FORESIGHT - PLANNING - TAKING A CHANCE ON SOME NEW TECHNOLOGY!!!!!!!!!!
     
  9. NJSalesPro

    NJSalesPro LawnSite Member
    Male, from New Jersey
    Posts: 19

    Yeah I understand the concept Efficient = Profit. But you have to have a base rate to use to charge someone. I'm using a 21" deck mower for now.
     
  10. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    NJ - ?? What is the going rate for the property in New Jersey - If you can bring pictures to them, and convince them you are going to do more for them than the last guy, you can raise the going rate a bit, if you can not do that, you had better be the low bid. Period, end of arguement!@!!
     

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